Three myths about bankruptcy that are completely false

Throughout the years, bankruptcy law in Australia has changed dramatically. Many people believe a lot of myths surrounding bankruptcy. Most of our time, here at Bankruptcy Solutions, is spent correcting these myths. Here are three of the most popular misconceptions people have about the bankruptcy processes. We’ll clear them up for you!

1. “If I go bankrupt I will loose everything.”

This idea usually stems from popular TV shows. Dramatic stories where everything is being shipped out the door and the family is left on the street. In Australia, this is far from the common reality. None of your household items are of any interest to the tribunal. The only thing that they care about is property and vehicles, and more often than not, we can help you keep those too.

2. “If I go bankrupt, it will be posted in the newspaper and everyone will know.”

This myth stems from the ‘old days’ when this actually used to happen. Nowadays this is completely false. Bankruptcy is an extremely confidential process. The only people that will know about your bankruptcy are us, your creditors and the people you choose to tell.

3. “If I go bankrupt I’ll never be able to buy property or take out loans again.”

This, again, is completely false in Australia. You will be filed as a bankrupt for three years. Within this time you can borrow up to $5,000. After this three years you will be automatically discharged. Your credit rating can be damaged from 5 to 7 years by your creditors if you are currently in default of payments. If you have been late with payments to creditors and are in default, chances are that your credit rating is already damaged.

In short, you can most definately buy property after your time as a bankrupt. If you want to take out a home loan before your credit rating is cleared-up, there are lenders that will be happy to help.

Hopefully this has cleared up some questions you might have. Please feel free to chat to us today so that we can help you further.